Tuesday, November 16, 2010

Labaton Sucharow - The $403 An Hour Temps

"Dear Tom,

There was a hearing on Monday November 15, 2010 before a federal judge regarding the payment of attorney fees to Labaton Sucharow in the infamous Countrywide project. Please see the article below regarding Labatoilet's use of 119 'short-term attorneys,' better known as temps. We worked directly for this sheister in sweatshop conditions for a measly $32 an hour, with no time and a half and no medical or any kind of regular employee benefits. Now, Labatoilet apparently expects Judge Pfaelzer to approve paying them $403 per hour for our document review services. And of course Labatoilet gets a paid opinion from some bozo mediator named Diamond that states it is 'an extremely reasonable rate.' Well, it does not seem reasonable to me that you pay somebody $32 an hour and then turn around and charge $403 for that person's work. I wonder if the NYS pension funds and Judge Pfaelzer consider this a fair margin of profit.

If you think this is egregious billing and wish to make your feelings known, here is the contact information for the judge: According to the court's website, The best way to contact the judge's courtroom deputy clerk is by calling 213-894-5286; if the clerk does not answer the phone, be sure to leave a voice-mail message.

Hon. Mariana R. Pfaelzer
Court Clerk: Cynthia Salyer
Al Courtroom No.: 12
Telephone: 213-894-5286"


http://www.law.com/jsp/article.jsp?id=1202473741442

110 comments:

Anonymous said...

Damn....talk about ROI....I'm on the wrong end of this law business...

Anonymous said...

In support of the above, I want to explain that most temps were billed out at $325 an hour at an associate rate, and the average billing for all associates, both "temp associates" and Labaton associates was $403.
http://www.countrywide
securitiesclassaction.com
/PDFs/Compendiumof
IndividualDeclarations.PDF

HERE IS MY PREVIOUS POST


This is for the temps who worked on the Countrywide case at Labatoilet: http://www.countrywidesecuritiesclassaction.com/PDFs/CompendiumofIndividualDeclarations.pdf
I bet you did not know you were billed out as associates; check out pages 15 to 20.
The fee application hearing was in federal court today before Judge Pfaelzer in the Central District of California Western Division. Remember that Labatoilet made the temps short term attorney employees, an eupehmism for temp, after been sent there to Labatoilet by agencies and then cut out the agency from the picture and paid them $32 an hour with no overtime or employee benefits. Then Labatoilet turned around and labeled their temps associates and billed the client, the NYS pension funds, $325 an hour for their document review services. Quite a markup don't you think from $32 an hour to $325 an hour? I wonder if the NYS Comptroller or Judge Pfaelzer knows or cares that this application fee petition is a scam and a work of fiction. Just another example of sickening greed in the US economy where the little guy gets screwed and the filthy rich get richer. Sleep well Joel, Ira et al while your obscene settlement comes out of the mouths of the working class people, the pension funds of the teachers, firefighters and police of NYS. Way to fight for the little guy from your ivory tower. I bet though you are very progressive in your politics, always contributing to worthy social causes, from the safety of your suburban oases, of course.

10:57 PM

Anonymous said...

well according to the article the contract did nearly half the work, so they should get half of the fees. Lets see these try and win cases with out contract attorneys, they can't and they know it.

Compensation Lawyers Liverpool said...

Nice edition...Compensation Lawyers Liverpool

Anonymous said...

That is all they are billing? They better pay us less.

Anonymous said...

Great job of billing David G. 5,672.2 hours at $600 an hour; I bet you are worth every penny of $3,403,320.00. That says senior partner material to me! Let me quote from the law.com article: "Diamond, who is getting paid $750 per hour for his consulting work, said that partner billing rates of $550 to $865 "seem on the low side" and that the blended rate of $403 per hour, when accounting for paralegals and associates, appeared to be "an extremely reasonable rate for a New York or Los Angeles firm handling cases at this level."
Yeah, $55 million in attorney fees and expenses seem like a steal to me. I don't know how Labaton keeps going at these dirt basement fees. No wonder Ray P. is forced to penny pinch and lay off people. Actually, paying temps $32an hour flat rate seems more than generous. Ray's own billing rate is a measly $515 an hour and he billed only 42.5 hours on this case. I would have thought it would have taken much more hours than that to come up with such a beautifully presented and creative billing statement for this case. Again, I say "extremely reasonable" all around here! And what's more I believe that these billing machines should keep all their hard earned income by having the Bush tax cuts extended in perpetuity. We need to reward the upper echelon types like Labaton partners who make this country what it is. And the NYS pension fund type people: Well, let them eat cake if they can afford it after a hard won settlement by Labaton.

Anonymous said...

Forget the car companies and Lehman Brothers. Two of the biggest states in the country are teetering on the edge of bankruptcy, thanks to ridiculous union agreements that can’t be changed.

If California and New York State were businesses, they'd be going bankrupt.

The New York pension fund doesn't care that LabaToilet bills them such an obscene rate because the pension funds are going bust anyway! Remember, it's all taxpayer backstopped anyway! Gotta love this country.

Anonymous said...

The temps were called short term contract attorneys, but listed as associates for billing purposes.

Anonymous said...

8:30 AM

You want us to forget about our lack of leverage regarding our contracts in the legal sector to shift to complaining about the tool (unionization) that may provide leverage? One can argue that it may not giving outsourcing, but its a little strange to rant against it based on the examples you provide, which illustrates employees obtaining better deals even in bad economies.

You argue that these governments may go "bankrupt" because unions negotiated better deals. In other words, government workers, which is analogous to our position, were able to negotiate binding deals with government employers, which is analogous to law firm employers. Why is this a bad thing?

Disparage the labor force in the government sector all you want for being organized, but you can not complain about the fact that we have no similar leverage to obtain more from the $403 hours they charge for us than the $35? Or to ask us to forget it based on your change of subject. Your change of subject illustrates why we should want more.

Also, I should point out that you are factually wrong about why the governments are facing economic hardship. Its a result of a) reduced tax revenues because a lot of people are unemployed and b) bad investment of pension funds as a result of investing in private sector ventures that involves the bad debt still held by banks.

This is like complaining that we as contract attorneys should be blamed for the employer charging us out for $403 per hour. It simply does not make much sense.

I can see why you do document reviews for a living. You lack analytical skills.

Anonymous said...

I contacted the clerk there and the 'fairness' hearing regarding the attorneys disbursements has been adjourned to early December (December 6, perhaps?) so you, as a former several-month "associate" of Labaton still have the opportunity to bend the judge's ear.

Anonymous said...

I thought that hiring us as regular employees was to ensure that we could not argue for overtime. But little did I understand how nefarious this practice was: it was designed to gain roughly $15 - $20 million extra by claiming we were associates when Labaton sought attorneys' reimbursements from the class settlement fund! Remember, Labaton was chosen as lead counsel for a plaintiff's class and their charges are reviewed for honesty! And remember that when a white shoe firm bills the client for its doc reviewers, the white shoe firm charges exactly the disbursements made to Update, Hudson, etc., and no more!!

Anonymous said...

Maybe some calls and emails to the NYS and NYC Comptrollers are appropriate as well as to Judge Pfaelzer? I believe it is time to expose the billing practices of Labaton and its exploitation of their "short-term attorney" employees as well as their gouging of the settlement fund for the pensions of NYS teachers, firefighters and police.

Anonymous said...

In 1998, New York spent about $3.4 billion on pensions for state and local government workers. A decade later, that figure had ballooned to nearly $7 billion, a jump of more than 100 percent, according to the state comptroller.

State taxpayers footed most of the bill.

In fact, last year, for every $100 a government worker spent on his or her retirement, taxpayers contributed about $1,000. At the same time, residents continued to see their own private pensions shrink or disappear.

New York's public workers can retire at age 55 with guaranteed benefits. They have to contribute to their retirement plan for only their first 10 years on the job, and they pay no state income taxes on their pensions.

Compared with the average New York worker, state and local government employees receive the gold standard of pensions.

In 2009, New York is estimated to lose $776 million in income taxes because pensioners are exempt -- much needed money considering the state faces an estimated $13 billion budget gap.

Anonymous said...

Even if we take what you say as fact 2:51, how does that justify a law firm ripping off a client like that?

Anonymous said...

It doesn't. Just saying that everything in this country has become a rotten to the core scam. Schools, firms, public employees with 500k pensions are all looking to grab their piece before the whole system implodes.

Talmud Scholar said...

Don't forget: the Talmud authorizes such sharp business practices, and, ultimately, that's all that really matters to the Iras and Diamonds of the world.

Anonymous said...

3:35

Good question.

Even after his or her "explanation."

The thrust of this site (and similar sites) is that we should earn higher wages and work under better conditions with more stability.

Describing negotiation of better wages as "corruption" is strange under the circumstances.

The "corruption" line seems to be that an attempt to push anger over other workers for negotiating better financial outcomes than we have. Not sure how wage increases are "corruption." But, the numbers alone are suppose to incite us to anger.

I guess they writer does not realize he or she is missing a few beats.

Anonymous said...

I don't know what anyone is complaining about!?! If you are looking for an easy job, go to Sullivan & Cromwell. Supervision is practically non-existent, so you can take 6 hours of break time and bill for all of it! Shoe shopping on company time, anyone? :) Time sheets are never checked against sign-out logs, so you can practically make your own schedule. Also, everyone has internet access and no one cares if you spend all day emailing, surfing, and chatting. There's more goofing off then there is work being done. No supervision means no quotas, so feel free to spend your day shopping and walking around, no one will notice the crappy job you are doing. You can make well over $500 a day for doing nothing except eating and surfing the internet. Take advantage now, while you still can!

Anonymous said...

Yes, 7:54, you speak the truth! Sullivan & Cromwell epitomizes the abuses and unethical corruption of the field of law. So long as you are on the preferred list (the details of which I which I won't get into here), ... everything there is done with a perverse wink and nod ... as nobody does anything but bill time. Almost all of the full time employees are morons, and I know for a fact that up to 90% of the work that the temps, analysts and junior associates do is just put in the shredder as the partners laugh all the way to the bank enjoying the fruits of their billable hours. The policy at S&C is to cheat and steal. The rationalization is always that the client is rich so who cares. S&C should be shut down. It is a cesspool of corruption, stupidity, and dishonesty. It is a criminal enterprise. The only people S&C attracts and retains are criminals, morons, and scumbags.

Anonymous said...

For that same "nothing," the firm in the article earns $4030.00 for a 10-hour shift or $4,806 for a 12-hour shift.

In less than 2 days, they earn enough billable hours to cover the cost of you being in the position for a month.

In a month or 20 days, using the conservative 10-hour shift, they earn $80,600.

This is more than you will likely see in the entire year, especially when one factors the lack of benefits into the wages and benefits equation.

They can't pay you more to sit that fewer hours while they are making a lot of money regardless?

If you still don't see it, you should consider sterilization to avoid corrupting the gene pool.

Anonymous said...

Colleagues:

Even first year associates who make $160,000 a year "only" make $80 an hour based on 2,000 billable hours. They are billed out at $350 an hour, if not higher. Certainly, document reviewers will not come out better.

In addition, sometimes an agency is involved and they must make at least $20 an hour.

Also, a plaintiff class action firm like Labaton has to fund the case by putting up well over $1 million dollars to get a payout. And in some cases, claimants have gotten nothing.

The bottom line is that you cannot get rich working for others.

Anonymous said...

(a) First years make more than that with bonus. They make even more second and third year.

(b) They are not performing higher work than document reviewers in the first years out of law school. Many of the people on the document reviews are often associates.

Yet, even the first year's 80 is higher than what document reviewers make. In fact, its $45 dollars per hour more.

(c) Document reviewers must pay for their benefits out of the $35.

(d) Law firms obtain loans to finance the litigation. The money is not out of pocket. Even if its not, that does not justify the mark up difference between what they pay document reviewers versus associates versus what they receive in billable hours.

Its true can not get rich working for others. You also cannot get rich stupidly allowing others to exploit you.

Anonymous said...

The name Labaton looks and sounds very much like Labia.

Anonymous said...

Did Update Legal close in DC?

Anonymous said...

Labadouce sux, I am gonna call the judge, down with labadouce, F Judith Android and her cigarette smoking crimply ass, F that fat slimely CFO F feinstein, F countrywide, F oorangelo, SMack the Black off Em!!

Better Coder said...

All,

Thought I'd write to let everyone know I am still working. And yes, still at 50/75. Things are slow now so only working a 60 hour week - but it's easy. Us assistants to the staff attorneys, or the ninth levels as we like to joke to the first levels (LOL), are waiting for a big push of first level docs to make their way to us. That means a lot of sitting around right now. I find it best to shop for the winter wardrobe during days like these. I am currently in the market for Boss sweater and scarf, with some Triple Five Soul boots.

Anyway, I thought I'd also add that as a ninth level (LOL), I've been privy to marking up the bills that get passed through to the firm's billing department. As I'm sure most of you are curious, the first level's on my project are billed at 350/hour from which the agency charges the firm 110. And of course our project pays the first levels 30 with NO OT. As you all know, ninth levels make 50 and OT. The agency therefore gets 150 for us and the firm charges 400 to the client.

Personally, I think it's a fair arrangement. If you are the best then you should be compensated accordingly. Besides, if you responsibilities aren't that great - in other words your expenses are low like mine - it makes sense that you have complete and total focus on the task at hand. You should therefore be paid more. The mother of two - not so much. I compare the situation to when I am staring down the barrel of a gaping pink eye - I think of nothing else except how the woman will think I am the best after which she will compensate me accordingly. The father/mother (husband/wife) have no real focus. They will bang (not a pretty site) and maybe the husband will ask for anal, but the wife/mother will say, 'we'll wake the baby.'. Then they fall asleep. You see. No real focus. A pre-occupied coder is a terrible coder is an underpaid (and rightfully so) coder is a coder who will likely 'get called' (as a result of my recommendation).

Very Truly Yours,
Better Paid Because I Deserve It.

Anonymous said...

Looks like David Perla gets the last laugh, all the way to the bank!

http://www.abajournal.com/news/article/report_thomson_reuters_to_acquire_indian_legal_outsourcing_co_pangea3

Legal information giant Thomson Reuters – owner of the storied brand West Publishing – is about to get into the business of providing legal services, according to the company.

Thomson announced Thursday evening that it is acquiring Indian legal process outsourcing company Pangea3 in a deal the Business Standard of India valued at between $35 million and $40 million.

Pangea3 is one of the largest legal outsourcing firms in India, with more than 650 employees and annual revenue in excess of $25 million, according to the Business Standard. A number of venture capitalists have invested in the company, including Silicon Valley’s Sequoia Capital which invested $7 million in 2007.

The company “offers services like patent analytics and patent prosecution services, legal research, business and competitive intelligence services, commercial contracting and licensing services among others,” the article said.

Thomson Reuters already has about 8,400 employees in India, but this would apparently be the first time the company would be providing legal services themselves, rather than just legal information and consulting services to law firms and other legal providers. The move into providing legal services – and, at least in a small way, competing with its own legal information clients – comes at an interesting time, as the United Kingdom readies to allow companies to invest in law firms next year.

The ABA Journal profiled Pangea3 in October 2007. At the time, newly minted lawyers who joined the company earned a mere $7,000, compared to $160,000 first-year lawyers earned at major U.S. law firms.

Anonymous said...

Bitter Loser, your posts get longer and more pathetic.

Your schtick is tired, unimaginative and terribly unfunny.

Anonymous said...

Hudson Legal is currently staffing the following position:





Start date: Saturday Nov 20. or Monday Nov. 22



Rate: $33/hr
Duration: 2-3 weeks (There may be work over Thanksgiving weekend)
Location: Midtown, Manhattan
Requirements:
Attorneys licensed in any US jurisdiction with prior document review experience.
MUST APPLY ASAP TO BE CONSIDERED
If interested, please email your most current resume to LEGALJOBS@HUDSON.COM immediately. In the Subject Line, please reference Thanksgiving Project.

Ryan said...

If you are a lawyer shouldn't you sue him for screwing you. Don't complain on a blog you are getting ripped off sue him. Take some action and stand up for yourself. You can bi*** and moan about how unfair it is, but if you ever want to succeed as an attorney go after him.

Anonymous said...

Hudson is one of those agencies I do not get. They will work will call me for some projects- typically a law firm requests me back and Hudson as has the contract.

Yet, when I contact them for other projects, they completely ignore me like they don't know me.

Its like a weird blacklist that is in no way related to what the law firms actually think of me who have actually hired me through Hudson.

This is all personality driven.

Anonymous said...

3:47 PM, you are correct, and it's the same with every agency. You don't get calls because people don't like you. Just take solace in the fact that if people in this industry don't like you it means you're doing something right as a human being.

Anonymous said...

LOL Better Coder. Any plans this Thanksgiving?

Anonymous said...

Go to the following link and send the petitions-it only takes a few seconds-we may all be needing it-petition for student loan bankruptcy-I am fighting Access now in court and I welcome their hatred-do the same for yourself. The time has come to fight, cowering will no longer be of any help, expose the cannibel cowards for what they are on every project-now we hang together or hang seperately-your choice but I'd rather hang in good company. From a long time temp.

http://projectonstudentdebt.org/letter_view.php?idx=21

Anonymous said...

yes Better Coder will be back at the usual leather bar on Christopher Street cross dressed into a woman and having various long objects stuck up his behind.

Anonymous said...

I don't always drink when reviewing documents, but when I do, I prefer Dos Equis. Stay thirsty my friends.

Anonymous said...

Good post as always Tom. Our "profession" is such a disgrace. And to think we're the ones who are supposed to bring justice to society!

Anonymous said...

The document review attorney is the "Least Interesting Man in the World". I dont always drink when i code, but when i do it is Mad Dog 20/20.

Stay neaseaus my friend.

Anonymous said...

On September 15, the House Judiciary's Subcommittee on Commercial and Administrative Law passed H.R. 5043, the Private Loan Bankruptcy Fairness Act of 2010. This is an important step forward for students and consumers, and we are hopeful that the bill will continue to move forward.

Please urge your representatives in Congress to support these bills to provide fair treatment of borrowers with private student loans.

CLick on the following link to fax petition-Fax one every day from now until the current sessin ends

http://projectonstudentdebt.org/letter_view.php?idx=21

Anonymous said...

i do always drink beer, and when i am coding i can afford coors banqeuts.

Anonymous said...

Not sure if this is related, but I like the smell of farts.

Anonymous said...

Once loans are dischargeable, then the whole house of cards will cokme crashing down.

Anonymous said...

He has borrowed more than $150,000 to get a law degree, he works more than 80 hours a week at $22 an hour flat, he codes more than 1000 documents a day in the hopes of becoming a partner. He is the DUMBEST MAN IN THE WORLD.

"I have never made a good decision about my legal career, and when I do, it will be a fucking miracle."

"Stay stupid my friends."

Anonymous said...

He is...Better Coder.

Anonymous said...

Has Better Pillow Biter contracted AIDS yet after being a sloppy bottom for all of these years in the Village?

Anonymous said...

Dental plan lisa needs braces

Anonymous said...

Anyone else get a call from Beacon Hill Staffing today? Does anyone know anything about them and the projects they are working on now?

Anonymous said...

Looking really a professional blog.
www.zwebhosting.in

Anonymous said...

Man...anyone see the news about bonuses this year? Cravath went much lower than many associates expected.

Anonymous said...

Bekon Hilz da shit man! Dey lay yer ass off one week before bennies kick in. Class act yo!

Anonymous said...

and this is just from undergrad

http://gawker.com/5696300/what-200000-in-student-debt-looks-like?skyline=true&s=i

Anonymous said...

Given the nature of class action plaintiff's work, i.e. the plaintiff's firm takes on all the risk, pays every dollar of fees and costs, and advance not only their attorney's time, but the time of their support staff and temps, a certain amount of "inflation" is to be expected when the plaintiffs are successful. If you were going to risk MILLIONS of dollars, you’d expect a little pay back too when your wits and hard work paid off, many years after the first dollar was spent.

That said, $325 lodestar is in-line with the going market rate for associates (under 7 years) in fee petitions for claims of this nature in major markets. Partners bill for reviewing documents, associates, etc. Reviewing documents is a primary function of being a lawyer and a fee petition doesn’t care if an associate or partner was “reviewing documents” or “drafting memo” or “negotiating settlement,” the same lodestar applies.

The fact that the legal system is increasing the division between those who are rich and those who are poor, unlike almost any other vocation, is another issue entirely.

Anonymous said...

I like the smell of farts.

Anonymous said...

Grabbaschlong Suchandblow

Anonymous said...

I love the smell of queefs, the closeted fishmonger that I am.

Anonymous said...

To the unemployed and underemployed lawyers of the world, my heart and my best wishes go out to you. Competing in a global economy while under the heal of hundreds of thousands of dollars of student loans marks a tremendous reversal of fortune. I understand how many of you feel lied to by your professors, your Alma-mater, and all of those who told you that law school was a good investment.

As an engineer, I understand what you are going through; outsourcing and temporary employment have devastated career prospects for my peers in the US. Even as prospects for new and experienced engineers have dried up, our nation's institutions continue to clamor for new engineering graduates.

I wish I had an answer for these times, but I do not. I agree that there is an 'education bubble,' and Law is not the only field affected! Look at the career web site of any US technology company, and you will find scores of job openings for engineers - in Bangalore, Singapore, or Beijing.

I am leaving my profession to seek a job in a field that is customer facing. Teaching looks promising, as does sales. Neither of these jobs can be outsourced to lower paid workers in other countries.

Best wishes and good luck.

Anonymous said...

The best jobs are salesman or any government job, which by definition can't be outsourced (except IRS work).

Anonymous said...

Even Tom the Temp was outsourced, he quit this blog and writes about Indian Sweatshops now.

Anonymous said...

Although their buddies are probably on the board, someone should file a complaint with the State Bar.

Anonymous said...

3:47, it's just not Hudson that calls people based on personality. It's an industry wide problem.

People can cheat on their time sheets as long as they backslap with the agency nitwits.

Anonymous said...

1:15pm
You missed the whole point of the original post or else you are a shill for Labaton. The 100 plus people who were billed out at around $325 an hour were not Labaton associates; they were temp attorneys paid directly by Labaton at $32 an hour and fired after the project ended. Labaton internally classified these people as coders, but on the fee petition classified them as associates so that they could pad the bill. If this is not fraudulent billing, then I do not know what is.

Anonymous said...

Tom the Temp is dead. The evildoers have won.

Anonymous said...

The end is here. ABA will accredit foreign law schools.

Get ready to get OUTSOURCED:


As we previously reported (but reluctantly we have not stayed on top of the story) this past summer an ABA committee recommended that the ABA consider the accreditation of law schools outside U.S. borders. Must be an issue because there are just not enough lawyers and too many legal jobs unfilled, right?

You might still be able to submit comments. For our full post click here: http://bit.ly/e56CP8

boycie said...

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Anonymous said...

Most of the Republicans just elected to Congress do not believe what their scientists tell them about man-made climate change. America’s politicians are mostly lawyers — not engineers or scientists like ours — so they’ll just say crazy things about science and nobody calls them on it. It’s good. It means they will not support any bill to spur clean energy innovation, which is central to our next five-year plan. And this ensures that our efforts to dominate the wind, solar, nuclear and electric car industries will not be challenged by America.

Personal Injury Laywer Las Vegas said...

he fee application hearing was in federal court today before Judge Pfaelzer in the Central District of California Western Division. Remember that Labatoilet made the temps short term attorney employees, an eupehmism for temp, after been sent there to Labatoilet by agencies and then cut out the agency from the picture and paid them $32 an hour with no overtime or employee benefits.

Anonymous said...

I like the smell of farts.

Anonymous said...

Now there are restaurant and cooking jobs starting to open.
But for lawyers if there is a single opening for $18 per hr there is a flood of applications with the fancy resume.

"I am prestige. I hold a juris doctorate."

Remember the agencies exist and get away with their shit treatment of temps because the lawyers allow them to. They go to law school claiming to be fighters for people's rights and are more sheep than any trucker or any union worker. Scared of their own shadow and only kissing ass.

Anonymous said...

Just in case you didn't notice, there's a Craigslist ad in New York from yesterday seeking document reviewers... oh, excuse me ... "legal professionals" ... whatever the fuck that means ... for $15/hr. Yeah, that's not a typo. $15/hr for a securities review. Three years ago you could get $35-45/hr + time and half for OT for this type of bullshit. Enjoy:

Date: 2010-12-03, 3:01PM EST
Reply to: job-7y5bj-2093363434@craigslist.org [Errors when replying to ads?]

Downtown law firm is seeking legal professionals for securities document review project.

Term will be for several months, full time. Compensation will be $15 per hour as an independent contractor (1099).

Project starts immediately; hiring now.

Compensation: $15 per hour 1099
Principals only. Recruiters, please don't contact this job poster.
Please, no phone calls about this job!
Please do not contact job poster about other services, products or commercial interests.

Anonymous said...

Kelli Space, 23, graduated from Northeastern University in 2009 with a bachelor's in sociology — and a whopping $200,000 in student loan debt. Space, who lives with her parents and works full-time, put up a Web site called TwoHundredThou.com soliciting donations to help meet her debt obligation, which is $891 a month. That number jumps to $1,600 next November.

In creating the site, Space, of course is hoping to ease her financial burden, but it's "mainly to inform others on the dangers of how quickly student loans add up," she said. So far she's raised $6,671.56, according to her site.

Space is just one example — albeit an extreme one — of a student loan bubble that may be about to burst. Over the last decade, private lenders, abetted by college financial aid offices, eagerly handed young people hundreds of thousands of dollars to earn bachelor's degrees. As a result of easy credit, declining grants and soaring tuitions, more than two-thirds of students graduated with debt in 2008 — up from 45 percent in 1993. The average debt load is $24,000, according to the Project on Student Debt.

Anonymous said...

In some respects, the student loan crisis looks remarkably like the subprime mortgage crisis. First, outstanding student loan debt has ballooned: It grew roughly four-fold in the last decade to $833 billion as of June — surpassing outstanding credit-card debt for the first time.

Secondly, defaults have soared amid a difficult job market. In 2008, the most recent year for which data are available, nearly 3.4 million borrowers began repayment, and more than 238,000 defaulted on their loans. The number of loans that went into forbearance or deferment (when borrowers receive temporary relief from payments) rose to 22 percent in 2007, from 10 percent a decade earlier, according to The Chronicle of Higher Education. Over a 15-year period, default rates range from 20 percent for federal loans to 40 percent on loans to students who attend for-profit schools, The Chronicle found.

Just as lenders offered easy no-money-down mortgages to unqualified borrowers during the housing boom, private student loan firms offered instant online approval for up to 100 percent of college costs to students, in some cases for four consecutive years. In early 2007, half of loans made by Sallie Mae, one of the industry's biggest players, were to students with no co-signers, according to Mark Kantrowitz, founder of informational Web site finaid.org.

As tuition costs have outpaced the caps on federal loans, more families have turned to private loans, which carry higher interest rates and stricter repayment rules. Last year private lenders supplied about $10 billion in loans (compared with $100 billion in federal loans). A study by the College Board found about a third of graduates in 2007-2008 had private loans. About two dozen private lenders offer student loans, and their business is growing at 25 percent annually, after a temporary decline amid the recent credit crisis, according to finaid.org.

Space, for instance, took out $12,000 in federal loans and borrowed $189,000 from private lender Sallie Mae. In an email interview, Space said she spent the money on tuition and room and board for four years; two summer semesters; a three-month study abroad program in Ireland; and books for three semesters. Some $20,000 of her debt is accrued interest. (Interest rates on her loans range from 3 percent to 9 percent.)

Space worked throughout high school and college at restaurants, retail stores and a nonprofit firm. But her savings dissipated quickly at Northeastern, where annual costs are $49,452. She's now looking for a second, part-time job. (Northeastern officials did not respond to an interview request.)

You'd think would-be borrowers would understand the impact of borrowing that much for college, but Space says that's not the case. "I think it is essential for young people to have someone sit down and explain how [loans] affect your credit, how much the debt will be with interest, and how this will truly change life later on. Many people say loaded things, like, 'go to the best school you can get into,' or 'student loans are considered good debt.' Solely following this advice led me to the place I'm at today," she said in an email.

A Sallie Mae spokeswoman said she couldn't comment on Space's situation, but called that level of borrowing "extremely rare." Sallie Mae requires its private student loans to be certified by the school's financial aid office to ensure that the amount borrowed is no more than the cost of attendance, less any other financial aid received. She added that Sallie Mae reviews the applicant's and co-signer's financial situation before approving a loan.

Anonymous said...

Meanwhile, securitization of student loans throws a twist into potential legislation. In May, Standard & Poor's came out with a report suggesting that restoring bankruptcy protection would have a negative impact on the private loan asset-backed securities market, although it called the magnitude of the impact "uncertain."

Kantrowitz, however, says the effect would be minimal: "In aggregate, we're talking about $1 billion a year — but relative to all the lending that goes on, it's not that much."

As for Space, she says she is determined to pay off her debt and regrets the path she took to get her degree: "Everyone from Barack Obama to Bill Gates keeps pushing a college education as the way to secure one's economic future. That is a view that should be heavily qualified."

On September 15, the House Judiciary's Subcommittee on Commercial and Administrative Law passed H.R. 5043, the Private Loan Bankruptcy Fairness Act of 2010. This is an important step forward for students and consumers, and we are hopeful that the bill will continue to move forward.

On September 15, the House Judiciary's Subcommittee on Commercial and Administrative Law passed H.R. 5043, the Private Loan Bankruptcy Fairness Act of 2010. This is an important step forward for students and consumers, and we are hopeful that the bill will continue to move forward.

Please urge your representatives in Congress to support these bills to provide fair treatment of borrowers with private student loans.

CLick on the following link to fax petition-Fax one every day from now until the current sessin ends

http://projectonstudentdebt.org/letter_view.php?idx=21

Anonymous said...

Anyone interested in starting a law school? Obviously, it's a good hustle.

I know a guy who grows pot in California ... legally. He swears he can turn a $30,000 investment into $250,000 profit in one year ... legally. His lawyer doesn't disagree.

He's rich. You're poor. But I don't want to move to California ... and you don't either. I live in New York and I like it. And opening a law school seems like a better scam anyway. Like Bernie Madoff ... except legal.

How hard can it be to open a law school? I went to Brooklyn. You went to St. Johns or Rutgers, or Seton Hall, or New York Law, or Cardozo, or any one of the other shit-stain law schools in the area. Just admit it, I won't hold it against you ... I'm one 0f you ...

So, let's start a law school. I'll teach ... fuck, I'll teach anything. I'm a fucking expert in everything. After all, I graduated from Brooklyn Law, and the textbooks for the course I'll teach is available in the book store for me to scan over before each class. Plus ... I can get a good outline for the course I'm teaching if I blow somebody.

Anonymous said...

Listen up you useless doc review attorneys who think you're all that as you play the lottery, start up your DOA law practice, or play online poker to buy yourself a ticket out of hell...

You're stuck. You've got skills that are a dime a dozen these days.

Retool and demonstrate your intelligence by thinking outside the box to make a living. Otherwise, just jump off the bridge. You're useless human beings anyways so long as you remain self-entitled JDs.

Anonymous said...

11:39, you are a cunt. And a moron.

Anonymous said...

The cuntliness of it all makes for a happy holidays.

Anonymous said...

And what would the legal industry be without cuntliness? Unemployment.

Anonymous said...

I don't always masterbate when I do document review, but when I do, I drink Dos Equis. Stay horney my friends.

cv said...

I agree with Labaton! I feel people will know the importance soon!


Lawyer CV

Anonymous said...

I miss stupid sexy Flanders.

A Law School Victim said...

Anonymous @11:45 PM . Hilarious, sometimes a sense a humor is needed in the midst of the drive you-crazy-trying to survive-business they call law.

bail bonds las vegas said...

Yes a sense of humor is well needed in a climate like this!

Price for all said...

Money is getting wasted in things which of no use. anyways thanks for sharing this with me.

Price for World

Anonymous said...

Post a new one !!

Anonymous said...

I got my J.D. from a well rated law school, Touro, and have never even gotten an interview. I have worked in word processing at a law firm on a temp basis. My ex-wife the princess who turned out to be the bitch from hell, convinced the judge that as a lawyer I must have a lot of money. I can't even pay my student loans back.
I just read on MS about how after a certain amt. of time people give up on searching for a job and become the permanently jobless.

Anonymous said...

Seriously, what the fuck has happened to Tom and this blog? I guess the agencies and BigLaw have won.

Anonymous said...

Any news on the Bank of Montreal - Marshal and Illsey bank merger. I heard that Bank of Montreal is repped by S& C. I wouldn't mind a merger now. Lots of hours.

Anonymous said...

Tom the Temp was swallowed whole by one of the toilets at S&C. He slipped into slime covered commode, next to shitfingers.

The last noise anyone heard was Tom saying, "this place is a filthy toilet....gurgle gurgle gurgle".

A fitting end for the spokesman of the silent generation of temp attorneys, forced to work in the midst of vilw smelly bathrooms, used by hundreds of substandard attorneys with questionable hygiene; working at cramped card tables, stuffed elbow to elbow with other temps for long hours, for no benefits and only $22 per hour.

Thank goodness all of these low paying jobs have been packed offshore to India and the Phillipines. American attorneys are too good for these long days of clicking. Especially those days when they were paid overtime, given meals and car service home.

RIP TTT.

Anonymous said...

Actually, the temps at S&C make $33/hr, and S&C still pays time and a half for overtime. (Some of the tragic, sad-sack permatemps make an even better rate.)

And they still pay for car service depending on your schedule.

So, it's actually a better monetary return for your effort than what you get on most other projects these days.

It goes without saying that working there makes wish you had never been born. It is without a doubt one of the worst places to temp in NYC. The people are AWFUL. Truly awful.

Also, it should be noted that you will not be working there for long unless you are black, or maybe some other minority. Temping at S&C would lead someone to believe that 80% of U.S. attorneys are African or West Indian. They're not. Whatever. Of course, there are a few token whites there. That's it. Reverse Racism.

Another downside: S&C has this habit of keeping a project staffed when there's no work to do. What's wrong with that, you ask? Well, do you want to be held hostage by the firm and your agency for 4 months billing 25 hours a week at $33/hr? I didn't think so.

That's the deal at S&C. So, go there and maybe make some money. But be warned ... you will hate yourself and your life.

Anonymous said...

Agency For Payroll Services?

I found a contract position on my own. They want to hire me as a contract employee. I am the first person they have hired like this. They don't typically work with agencies.

I am searching online for a payroll service for the project since they don't typically handle such issues to ease the process, but I am uninterested in the typical temp agency. I am seeking strictly someone to at as the employer of record for the purpose of tax issues, unemployment insurance, etc.

Someone here mentioned this kind of a service exists.

Does anyone remember the name of the organization or can you point in the direction?

Anonymous said...

A lawyer friend suggested that there are some law school that should just shut down. I get the feeling that those kind of schools are diploma factories.

As a teacher - I am also aware of diploma factory
grad schools for wannabe school administrators. But unlike law school - Educators can get that bigger paycheck and sometimes the nice admin job (connections, baby, connections)

Sorry to hear about these situations. Hope your days will be brighter.

Stupid Sexy Flanders said...

can't believe it's already "five golden rings." Xmas is right around the corner!

I wish I had something relevant to say, but not really. But I thought I'd say I wish everyone a fantastic 2011 and maybe the economy will get better. Who knows?

Nothing makes me happier than Xmas season and Xmas songs. Classics like Rockin' Around the Christmas Tree or pop songs like All I want for Christmas is You. Puts a smile on my face.

If you are looking for a law-related distraction, how 'bout a Lady Gaga song? After all her fleet of 28 trucks is buried in the snow somewhere in Europe. So this holiday season, forget about praying for the wellbeing of children and the poor, and hope that Gaga's trucks will be found. All else can wait.

A fun lyric goes:
"Russian roulette is not the same without a gun.
And when it comes to love if it's not rough it isn't fun."

So, lawyers, here are two questions:

1. If Jimmy plays Russian roulette and winds up killing himself, is that a suicide? Or an accident? Did he have an intent to kill himself? Is there some kind of intent that the coroner will conjure up? If it's a suicide, and Bobby provided the gun, can Bobby be charged with anything?

2. If Jimmy's girlfriend Annie gets off from being choked during um... relations, and Jimmy winds up killing her by accident, what is that? Is it an accident? Is there any imputed intent there? Recklessness? Negligence?

Tune in, same Flanders-time, same Flanders-channel, next week, for the answers to these perplexing and vexing scenarios.

Happy holidays everyone!!

Very Truly yours,
Flanders, stupid, but sexy.

Anonymous said...

Mark your calendars: http://www.cnbc.com/id/39911910

Anonymous said...

Merry Christmas to all the happy temps. Sincerely, the agency.

Anonymous said...

Speaking of being on the wrong end of the business . . . it seems associates were probably also making hourly about the equivalent of the temp attorneys while they were being billed out at $403/hour.

Check out this new start-up for contract & per diem attorneys to connect directly with firms; it's not a complete solution, but it skims off one layer of fat in the contract attorney quandary.

www.hireanesquire.com

Anonymous said...

Check this link out folks. A bankruptcy filing and Cleary Gottlieb filed for attorneys fee. Seach contract attorney. They charge $180 an hour for your time and pay you $30 an hour

http://amlawdaily.typepad.com/files/cleary-gottlieb-quarterly-compensation-request----nortel.pdf

Anonymous said...

Being a malpractice lawyer I found this article to be very informative. Help is out there and it’s easier to find if you know what you’re looking for.

Bobby Walls said...

Being a malpractice lawyer I found this article to be very informative. Help is out there and it’s easier to find if you know what you’re looking for.

Houston said...

Law firms are a business like any other- how do you feel after going to the ER and get a bill in the mail that equals 10k per hour or more for the doctors time? Sounds more reasonable than what we see every day by hospitals.

http://texas-truckaccidentlawyer.com

Steve said...

This is a great post for anyone that needs help with finding legal advice. I found a malpractice attorney in the Los Angeles area that helped me get to the bottom of my civil suit.

Ginny Crandall said...

I feel like this is just sad. There are many good lawyers out there, but the bad ones are making the good ones look terrible. My brother is an 18 wheeler truck accident attorney, and he doesn't make nearly that much, I know. The only reason that these corrupt attorneys make so much is because there are people willing to pay them that amount.

Attorney said...

$403/hour? It's ridiculous what some people charge for their services! And the people doing the work are often under-paid, like you said.
- New Jersey Attorneys

Anonymous said...

It may be because I come out of an older generation (1960s), but I think that all of these temp agencies and their clients are violating the NYS wage and hour laws. Document reviewers need to get together and hire a militant employee's rights law firm to pursue both complaints to relevant agencies and class action suits (where fees may be recoverable from the proceeds). Also, it is time for a document reviewers’ union and strike action across the board with all agencies and their sweatshop clients. Try for unions the CWA, etc.

Brian said...

Great post and informative. Finding the right abogado is very important when you need to deal with a law situation.

stacy said...

Being in lawyer malpractice can cause some major prolems for your life. I found this article to be very informative. Help is out there and it’s easier to find if you know what you’re looking for.

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Jennifer Davies said...

That's ridiculous. A little profit difference is understandable, but not something like that. And to fire the attorneys after the job is simply unethical. I hope the judge found the evidence in favor of the attorneys. They need to look for another law firm.

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